ETFs 2028:

Shaping the Future

Contents

About this survey 3

Overview 4

Section 1: Growth projections: 5

Capitalising on global demand

Section 2: Product trends: 10

Active and innovative

Section 3: Distribution trends: 12

Getting closer to end-investors

Section 4: Operational trends:

Delivering more for less 15

Section 5: The way forward:

Judging where and how to compete 17
About this survey

PwC surveyed more than 70 executives from around the world in 2023, using a structured questionnaire. Over 80% of the
participants were exchange-traded fund (ETF) managers or sponsors. The remaining participants were made up of service
providers, market makers and other asset managers.

The participating firms come from the four main regions of the global ETF market:

21%
Canada
26%
Europe

36% 17%
United States
Asia Pacific

The diversity of our sample allowed us to capture a broad range of views on the direction of the ETF market, both globally and
regionally.

We would like to thank all the ETF managers, service providers, market makers and other asset managers who took part in the
survey for sharing their valuable insights.

Unless otherwise stated:

• All figures come from PwC analysis and modelled projections using Lipper data as the primary source.
• All references to ‘mutual funds’ exclude ETFs.
• All monetary figures are in US dollars.

3 ETFs 2028: Shaping the Future

Overview

Welcome to ETFs 2028: Shaping the Future. The report explores the latest trends and future outlook in today’s increasingly
diverse, disruptive and fast-growing global and regional ETF markets.

It has just been over ten years since we published The next 25% year-to-year to reach a new record of almost $11.5 trillion
generation of ETFs: Why every asset manager needs an ETF at the end of 2023. The continued growth and even greater
strategy. Our 2013 report not only anticipated rapid growth opportunities ahead are reflected in our survey results, with
in ETF assets under management (AuM) worldwide, but also survey participants predicting global ETF AuM to reach at
an acceleration in innovation and diversification as investors least $19.2 trillion by June 2028. This would represent a 5 year
demanded greater customisation and product choice. CAGR of 13.5%. While we view this number as conservative,
this far outstrips the anticipated 5% CAGR projected for the
The clear question for asset managers who were still reluctant to asset and wealth management industry’s AuM as a whole in the
offer ETFs at the time was “how much longer can you afford to five years ended 2027.
sit on the sidelines?”
No time to stand still
Roll forward 10 years later and the number of ETF issuers has
more than doubled since 2013 to reach 582, with over 60% of With the unprecedented pace of change due to technological
the world’s top 100 asset managers now offering ETFs. disruption, climate change and geo-political environment
and the increasing need to deliver sustained outcomes for
stakeholders, ETF issuers need to lead the way on product
Exhibit 1 innovation and business model reinvention.
How the Global ETF market has changed since 2013 Our recent global Asset Management research predicts that
16% of asset management firms are in danger of being acquired
2013 2023 or going out of business in the next 3 years.
Global ETF AuM (USD bn) $2,376.1 $11,464.3 As ETF issuers operate with tight margins, technology is going
Number of ETFs globally 4,032 9,804 to play a key role in helping firms to drive changes in their
Number of ETF issuers business models from operations right through to reaching new
233 582 and emerging end investors.
globally

Source: Lipper Data Our survey finds that retail investors will be an increasingly
important segment of future growth looking for easily
understandable and accessible direct-to-market products,
From strength to strength which can be traded via a digital interface.

The rapid expansion in global ETF AuM anticipated in our 2013 The race to keep pace with today’s generational shifts and
paper has continued at a phenomenal pace. Having recorded a demands for personalised financial solutions will divide the
compound annual growth rate (CAGR) of 17.0% since 2013 and winners from the losers in this fast-evolving ETF and wider asset
18.9% in the past five years, global ETF AuM grew by more than management arena. The challenges are exacerbated by the
fact that, while investors demand more from ETF managers,
competition on fees remains intense, making profitable growth
challenging.

4 ETFs 2028: Shaping the Future

 Section 1

Growth projections: Capitalising on global demand

Growth in ETF AuM is now soaring worldwide as the US, Canada and Europe all raise their five-year projections for regional AuM
and the APAC region moves into a new phase of expansion.

United States

The US is the largest ETF market, with US ETF AuM surpassing $8.0 trillion in December 2023, which represents more than
70% of the global ETF AuM. The US respondents in our survey continue to be bullish about prospects for further growth. The
majority of US respondents (64%) expect US ETF AuM to reach at least $13 trillion by June 2028, with a 12.5% CAGR. However,
this includes 41% of US survey respondents who are even more bullish and believe that US ETF AuM would reach $15 trillion
or more by June 2028, representing a CAGR of 15.8%. The highest level of ETF demand over the next few years is expected to
come from financial advisors and intermediaries (76%), model portfolios (76%) and retail investors (72%) according to our survey.

Although the US active ETF market is relatively small in comparison to passive ETFs, active ETF AuM recorded a 35.4% CAGR
over the last five years, reaching almost $514 billion in 2023. Over 70% of the ETFs launched in the US in 2023 were actively
managed, with net inflows of $118.5 billion.

Exhibit 2
US historic and projected ETF AuM

64% of US survey respondents think that US ETF AuM will reach at

least $13 Trillion by June 2028, which represents a CAGR of 12.5%. Survey forecast responses
In June 2028, US ETF AuM
$bn
will reach…
15,000 AuM Survey
15,000 CAGR
$15 tn respondants
15.8%
5-year CAGR (or more) 41%
18.8% Survey
13,000 AuM CAGR
respondants
10,000 $13 tn 12.5%
8,094 23%
7,220
6,497 9,000 Survey
5,511 AuM CAGR
respondants
4,461 $11 tn 8.8%
27%
5000
3,424
Survey
AuM CAGR
respondants
$9 tn 4.6%
9%
0
2018 2019 2020 2021 2022 2023 2028

Source: Lipper data and PwC Global ETF Survey 2023

The US ETF market has evolved significantly over the past 10 years, including new issuers, product innovation, and regulations.
The launch of spot bitcoin ETFs in January 2024 is a significant development for the industry as described in more detail in
Section 2. Numerous proposals to launch an ETF share class in mutual funds could create another opportunity for significant US
ETF growth if approved by the regulator.

5 ETFs 2028: Shaping the Future

Canada

Canada recorded strong ETF inflows of $31.5 billion in 2023, which brought Canadian ETF AuM to $295.9 bn in December
2023, representing 3% of global ETF AuM. The resilience and growth of Canadian ETFs is in stark contrast to a year of low
inflows to Canadian mutual funds ($4.5 billion in 2023). Canadian respondents in the 2023 ETF survey are even more optimistic
about ETF growth ahead, with over 50% anticipating that Canadian ETF AuM will reach at least $700 billion by 2028, reflecting a
19.6% CAGR over that 5-year period. The highest level of ETF demand over the next few years is expected to come from retail
investors (88%), financial advisors and intermediaries (76%) and model portfolios (71%) according to our survey.

More than half of the net inflows in 2023 went into active ETFs ($16.1 billion in 2023). Active ETFs now make up more than 26%
of the overall Canadian ETF AuM, one of the highest proportions in the world. Canada active ETFs have had a 31.6% CAGR
over the last five years. Other fast-growing products include high interest savings account (HISA) ETFs as investors look to take
advantage of the increases in deposit rates.

The pace of expansion and development in the ETF market is attracting regulatory attention, with the Canadian Securities
Administrators (CSA) announcing a planned review of ETFs. The review will assess whether the current ETF regulations remain
appropriate, with a particular focus on secondary market trading, creations and redemptions by authorised dealers and the
arbitrage mechanism.

Exhibit 3
Canada historic and projected ETF AuM

51% of Canadian survey respondents think that Canadian ETF AuM will reach Survey forecast responses
at least $700 Billion by June 2028, which represents a CAGR of 19.6%. In June 2028, Canadian
ETF AuM will reach…
$bn
1,000 AuM CAGR
Survey
1,000 respondants
$1 tn 28.4%
5-year CAGR 13%
22.7% Survey
750 700 AuM CAGR
respondants
$700 bn 19.6%
38%

500 Survey
AuM CAGR
350 respondants
296 $500 bn 11.8%
43%
253 234
250 187 Survey
147 AuM CAGR
107 respondants
$350 bn 4.1%
6%
0
2018 2019 2020 2021 2022 2023 2028

Source: Lipper data and PwC Global ETF Survey 2023

6 ETFs 2028: Shaping the Future

Europe

Europe is the second biggest regional market for ETFs, with 16% of global ETF AuM in 2023. European ETF inflows of $158.2
billion were the second highest on record, with European ETF AuM reaching $1,789.2 billion at the end of 2023.

Our European survey respondents see significant further potential ahead – six out of ten believe that European ETF AuM will
reach $3 trillion by June 2028, with a 14.3% CAGR over that period. The highest level of ETF demand over the next few years is
expected to come from retail investors (71%), model portfolios (67%) and financial advisors and intermediaries (62%) according
to our survey.

Although Europe doesn’t as yet have the benefits of a US-style integrated capital markets infrastructure, it is slowly moving
in this direction. Plans include the central collection of real-time transaction data from all EU trading platforms as part of the
proposed “consolidated tape.” Greater transparency and integration would boost trading efficiency, ETF competitiveness and
cross-border investment for European listed ETFs.

Exhibit 4
Europe historic and projected ETF AuM

60% of European survey respondents think that European ETF AuM will reach
at least $3 Trillion by June 2028, which represents a CAGR of 14.3%. Survey forecast responses
In June 2028, Europe
$bn
ETF AuM will reach…
3,000 AuM
CAGR
Survey
3,000 $3 tn respondants
14.3%
5-year CAGR (or more) 60%
18.6% 2,200 Survey
AuM CAGR
respondants
2,000 1,789 $2.5 tn 10.2%
20%
1,581
1,276 1,392 Survey
AuM CAGR
1,027 respondants
$2.2 tn 7.4%
20%
1,000 761
Survey
AuM CAGR
respondants
$2 tn 5.4%
0%
0
2018 2019 2020 2021 2022 2023 2028

Source: PwC Global ETF Survey 2023

7 ETFs 2028: Shaping the Future

Asia Pacific

Asia Pacific (“APAC”) ETF AuM has been growing at more than 22% a year since 2013 to reach a record high of $1.26 trillion in
2023. This makes APAC the third largest ETF market worldwide, with 11% of global ETF AuM. Nearly half of APAC respondents
in our survey believe that regional AuM will catch up with Europe by 2028, reaching $3 trillion AuM, with a 17.8% CAGR over
that period. The highest level of ETF demand over the next few years is expected to come from retail investors (86%), model
portfolios (79%) and financial advisors and intermediaries (50%) according to our survey.

An example of some of the moves that will influence greater ETF adoption can be seen in Japan. The Japanese government
has given ETFs a further boost as it looks to encourage citizens to move their savings to investments. The incentives include
increases in investment limits and tax allowances in the popular Nippon Individual Savings Accounts (NISAs). In Taiwan, the ETF
market is also experiencing significant growth driven by younger investors and media influencers.

Exhibit 5
Asia Pacific historic and projected ETF AuM
77% of Asian survey respondents think that APAC ETF AuM will reach at
least $2.5 Trillion by June 2028, which represents a CAGR of 17.8%. Survey forecast responses
In June 2028, APAC
$bn
ETF AuM will reach…
3,000 AuM
CAGR
Survey
3,000 $3 tn respondants
22.2%
5-year CAGR (or more) 46%
18.9% 2,500 Survey
AuM CAGR
respondants
2,000 $2.5 tn 17.8%
31%
1,500
1,259 Survey
AuM CAGR
1,110 respondants
959 1,017 $2 tn 12.7%
15%
1,000 713
529 Survey
AuM CAGR
respondants
$1.5 tn 6.4%
8%
0
2018 2019 2020 2021 2022 2023 2028

Source: PwC Global ETF Survey 2023

The maturity of the respective ETF markets and regulations in each of the four major regions will continue to have a significant
impact on the growth and innovation of ETFs. Throughout this paper we highlight developments which will shape the future of
ETFs over the next few years.

8 ETFs 2028: Shaping the Future

New markets targeted for growth

When we asked ETF managers which regions they were focusing their distribution efforts in, while most were focused primarily
on their local regions and other established regions, evidencing the global nature of most ETF issuers. In addition, respondents
stated that between 18% and 27% of their distribution efforts would go to Latin America and the Middle East (see Exhibit 6),
which both present new opportunities for growth.

In Latin America, ETF AuM grew to $17.9 billion in 2023, up from $14.1 billion at the end of 2022, with Chile leading the way in
new registrations. In the Middle East and Africa, ETF AuM grew to $8.2 billion in 2023, up from $7.1 billion at the end of 2022,
with Saudi Arabia attracting the most registrations.

Exhibit 6
Regions earmarked for growth - Markets in which survey respondent’s organisations are focusing their distribution efforts in the
next 12 months
13%
20% 20% 20%

7% 24%
6% Asia Pacific Canadian
8%
respondents 17% respondents
9%

9% 11%
17%
19%

16%
17% 16% 23%

6% 11% 14%
European US
5%
respondents respondents
12%
8%

15% 23% 13% 21%

United States Asia Pacific Canada Europe Latin America Middle East Oceania

Source: PwC Global ETF Survey 2023

9 ETFs 2028: Shaping the Future

 Section 2

Product trends: Active and innovative

Although traditional passive equity and fixed income ETFs continue to make up the bulk of ETF AuM, ETF managers keep innovating
and diversifying their product ranges as investors seek out new investment opportunities and ways to balance their portfolios.

On the rise Exhibit 7

Level of demand by investors expected for active ETFs in
Active ETFs
Our survey results show that each of the regions expect the respondents’ regional market over the next 2-3 years
significant demand for active ETFs over the next two to three
years, led by Canada (82%) and the United States (76%). Asia Pacific 50% 50%
Canada 82% 18%
Canada and Australia are setting the pace, with active ETFs Europe 48% 43% 9%
accounting for more than 26% of ETF AuM in each of these United States 76% 21% 3%
regions. While the market share of active ETFs in the US is
comparatively modest at 6%, 2023 witnessed a remarkable Significant demand Moderate demand Little to no demand
surge in active ETF launches in the US and there has been
significant growth over the past three years. The trajectory
projects further accelerated growth in 2024 and beyond. Source: PwC Global ETF Survey 2023

Active ETFs only represent 1% of the ETF AuM in Europe and Active ETFs offer a gateway into the ETF market for mutual
APAC (excluding Australia). However, survey respondents fund managers with compelling investment strategies. In the
expect this trend to also take hold in these regions, with US, for example, many of the recent launches have been
approximately half of survey respondents predicting increasing initiated by major financial services firms that are new to
investor demand for these products. the ETF market. The growth in active ETF demand has also
spurred a wave of mutual fund to ETF conversions. A fifth
of the asset managers taking part in our Asset and wealth
management revolution 2023: The new context survey
signalled that they are planning to convert part of their mutual
fund offerings to ETFs over the next 12 to 24 months.

Alternative strategies could also receive a boost from the

growth in active ETFs. As we’ve seen in markets such as
Canada and Australia, adding an ETF class or series to an
existing alternative product can offer a compelling and efficient
distribution option for these products. Other regions continue
to consider operational and regulatory challenges in order for
this to be a feasible option.

10 ETFs 2028: Shaping the Future

Some mutual fund managers are still deterred by the costs Mixed prospects
and complexities of establishing greenfield ETF capabilities
or converting existing mutual funds, especially given the ESG ETFs
risks of cannibalising their own business for lower margins. The prospects for ESG ETFs continue to diverge, with demand
As institutional investors increasingly come to expect an in Europe forging ahead, Asia falling back and the US and
ETF option and self-directed retail investors embrace ETFs, Canada stalling.
weighing up the risks versus reward of making the leap is a
constant debate.
Exhibit 9
Fixed income ETFs Percentage of survey respondents expecting significant
2023 was a bumper year for fixed income ETFs, attracting opportunities for growth for ESG ETFs
$308.4 billion of investment worldwide, a 24.4% year-on-year
increase. 100%

The surge looks set to continue as investors rush to take 80%

advantage of current high yields ahead of anticipated 67% 67%
reductions in interest rates. More than eight out of ten survey 60%
57%
respondents expect significant demand for fixed income ETFs
43% 41%
over the next two to three years. But longer term demand will 35%
depend on movements in inflation and interest rates. 40% 31% 33%

20%
Digital assets
According to our survey results, digital assets are coming
more to the fore. One in five of our survey respondents expect 0%
Europe Asia Pacific Canada United States
significant investor demand for Bitcoin ETFs over the next two
to three years, with APAC out in front. 2023 2022

US respondents in our survey were less confident. However, Source: PwC Global ETF Surveys 2023 and 2022
sentiment may have evolved as our survey was conducted
prior to the US Securities and Exchange Commission (SEC)
approval of 10 firms with spot Bitcoin ETFs in January 2024. The contrast is even more marked when looking at product
After an almost ten-year push for some of those firms to launch plans. Almost 70% of European respondents expect
secure approval from the SEC, this is not only a significant more than half of their launches over the next 12 months to be
development for these US firms, but also for the ETF industry ESG-focused, compared to just 15% of their US counterparts.
as a whole, as yet again the ETF wrapper is the vehicle of
choice for this asset class. More than a third of respondents
plan to launch digital asset ETFs if regulators allow it in their Embracing personalisation
respective regions.
As the ETF sector continues to mature, niche products are
becoming more mainstream. The broad extension of product
ranges proposed to investors may not be enough in itself
Exhibit 8 given the importance of offering customised and personalised
investment products and solutions to attract and retain
Percentage of respondents expecting significant demand investors.
for Bitcoin ETFs
This shift from sales to solutions is likely to be accelerated
Asia Pacific 36% by heightened regulatory scrutiny on outcomes and value for
United States 21%
money.
Europe 14%
The resulting solutions are likely to include a mix of ETFs,
Canada 12%
mutual funds and other investment products. Firms that
Source: PwC Global ETF Survey 2023 don’t include ETFs within their solutions may be at a marked
disadvantage.

11 ETFs 2028: Shaping the Future

 Section 3

Distribution trends: Getting closer to end-investors

Most ETF firms are still relying on organic growth and traditional routes to market. But moves into retail and new emerging growth
markets are likely to require a broader set of distribution channels, capabilities and partnerships.

No surprise that 85% of survey respondents believe that developing distribution channels is the most significant factor in the
success of their business.

Gaining access to broker dealer platforms, having sufficient tools and resources as well as hiring, training and retaining strong ETF
specialists will continue to be important in reaching new investors and delivering more personalised solutions. These have been
identified as some of the biggest challenges for ETF distribution across all regions by our survey participants (see exhibit 10).
There are significant differences in the distribution of ETFs by region. Firms will need to adapt their distribution strategies as they look
to expand in new regions.

Exhibit 10
Distribution challenges (1 represents the area with the biggest challenges and 6 represents the area with the least
challenges)

Europe Asia Pacific Canada United States

Gaining access to broker dealer platform 1 4 1 1
Providing sufficient financial compensation to
provide incentives for broker dealers, financial 4 1 3 2
advisors, etc.
Having sufficient tools and resources, including
online platforms, customised reporting, ETF 2 2 6 3
model portfolios, etc
ETF education, both internally and externally 5 5 2 4
Ability to hire and retain strong ETF specialists to
3 6 4 5
help develop the best solutions for ETF investors
Direct marketing to targeted audiences 6 3 5 6

Source: PwC Global ETF Survey 2023

Looking specifically at the unfolding retail market, most respondents are prioritising investor education and customer experience.
European respondents also recognise the value of ETF savings plans for retail investors, an investor segment that has been
growing at a significant pace in Europe over the last few years.

Robo-advisors, mobile apps and direct investments are also considered important as firms seek to strengthen end-investor
engagement and improve understanding of their financial goals without the need for a costly intermediary. Failure to develop
effective mobile and other digital channels could also make it harder for managers to connect with younger investors into the future.

12 ETFs 2028: Shaping the Future

Exhibit 11
Attracting retail investment - factors to secure retail investor inflows

Robo-advisors Direct investments

Asia Pacific 50% 36% 14% Asia Pacific 36% 50% 14%
Canada 53% 41% 6% Canada 35% 59% 6%
Europe 57% 38% 5% Europe 33% 57% 10%
United States 31% 59% 10% United States 45% 52% 3%

Saving plans Mobile apps

Asia Pacific 50% 43% 7% Asia Pacific 50% 43% 7%
Canada 29% 53% 18% Canada 47% 35% 18%
Europe 76% 24% Europe 57% 38% 5%
United States 35% 55% 10% United States 34% 62% 4%

Lorem ipsum

Investor education Customer experience

Asia Pacific 93% 7% Asia Pacific 71% 29%
Canada 59% 35% 6% Canada 71% 29%
Europe 67% 29% 4% Europe 61% 39%
United States 69% 31% United States 62% 34% 4%

Commission-free trading
Asia Pacific 79% 14% 7%
Canada 29% 59% 12%
Europe 57% 33% 10%
United States 72% 17% 11%

Very important Somewhat important Negligible importance

Source: PwC Global ETF Survey 2023

Reaching into new markets

Respondents’ preferred route to market entry is by organic means. This can have its challenges where access to customers
is dominated by local private banks or intermediated channels. Only around one in five are prioritising partnership with a local
financial institution.

Exhibit 12
Preferred routes to new markets

3% 6%
20% Acquiring a local ETF manager
7%
Converting existing investment products into ETFs

Creating a joint venture with a local financial institution

3%
All regions Growing organically through new ETF launches locally

Partnering with a local financial institution

Partnering with a white label provider to leverage existing infrastructure,

19% including board, distribution, service providers, etc.

42% Passporting UCITS ETFs into the new region/country

Source: PwC Global ETF Survey 2023

Joint ventures or partnering with a digital platform provider could offer an effective option for mutual fund managers seeking to
enter the ETF market or ETF managers looking to gain a foothold in new territories.

13 ETFs 2028: Shaping the Future

 Reshaping incentives

In the US and APAC, more than 70% of survey respondents believe that commission-free trading will be very important in
attracting retail investment.

While the EU is considering a ban on commissions as part of its Retail Investment Strategy, the European Fund and Asset
Management Association (EFAMA) is pressing for a more qualitative approach that focuses on assessing investor needs and the
delivery of value for money1.

1
“EFAMA proposes alternative solutions to benefit investors within the Retail Investment Strategy”

14 ETFs 2028: Shaping the Future

 Section 4

Operational trends: Delivering more for less

Technology transformation not only holds the key to bolstering margins but also to opening up new distribution channels and
developing personalised solutions.

As an ETF manager, the pressure to deliver more for less is intensifying the squeeze on what are already tight margins. US and
European ETFs which have a total expense ratio (TER) of less than 50 basis points hold more than 90% of the total ETF AuM in
these regions.

One example where the operational demands are increasing is the move to a shortened T+1 settlement cycle in the US and
Canada effective May 2024. With timing disparities in settlement across worldwide markets, significant focus will be required on a
number of operational areas including redemptions, trading, collateral and cash management.

Technology holds the key to addressing increasing operational demands, cutting costs and sustaining returns. Building on the
foundations of versatile plug-and-play cloud platforms, developments in disruptive technologies like artificial intelligence (AI),
big data and blockchain could also help your business to strengthen investor engagement, better understand their needs and
accelerate product development.

Survey respondents in most regions see robo-advisors, online platforms and mobile apps as the technology that is likely to have
the biggest impact on the ETF industry over the next few years. The exception is the US, where big data, machine learning and
AI top the list. Many US firms have scaled back on robo-advisors and online platforms due to uncertain regulations and the
inability to obtain scale.

Exhibit 13
Ranking the areas of technology with the biggest impact on the ETF industry over the next two to three years
(with 1 having the most impact, 5 the least impact)

Europe Asia Pacific Canada United States

Robo-advisors, online platforms and apps 1 1 1 3
Big data and machine learning 2 3 2 1
Artificial intelligence 3 2 3 2
Blockchain and distributed ledgers 4 4 4 4
Metaverse 5 5 5 5

Source: PwC Global ETF Survey 2023

15 ETFs 2028: Shaping the Future

Rethinking everything

The rise of AI has added fresh urgency to digital transformation. PwC has predicted that AI could contribute as much as $15.7
trillion to the global economy by 2030.

AI can not only improve decision-making and speed up time-consuming tasks, but also provide a powerful catalyst for
transforming entire processes, functions, and business models.

The areas where respondents believe that AI will have the most impact over the next two to three years are marketing, indexing
and portfolio management. Operations is next on the list. Harnessing AI could give your business a decisive edge as you look to
get closer to end-investors and tailor solutions.

Exhibit 14
Areas impacted by AI - Expected impact of AI over ETF functions in the next 2 to 3 years

Compliance 19% 55% 26%

Operations 32% 40% 28%
Marketing 49% 36% 15%
Distribution 18% 68% 14%
Portfolio Management 39% 38% 23%
Indexing 45% 43% 12%
Product Development 22% 57% 21%

Significant impact Moderate impact Negligible impact

Source: PwC Global ETF Survey 2023

16 ETFs 2028: Shaping the Future

 Section 5

The way forward: Judging where and how to compete

This report highlights both the risks of standing still and the opportunities to strengthen innovation and ensure future relevance as
investor expectations evolve and retail investor markets open up across the globe. How can your business get out in front? Four
priorities stand out:

Think bigger and bolder

From a portfolio perspective, this pragmatic approach includes
If you already offer ETFs, the pressure is on to move further and taking advantage of infrastructure and distribution partnerships
faster as you strive to develop new offerings and position your to extend your capabilities and reach without overstretching
business for the renewed surge in growth ahead. This could your resources.
include expanding into new investment strategies, distribution
channels and new territories. From a technology perspective, moving forward on multiple
fronts is neither feasible nor advisable. So it’s important to be
Larger and better resourced managers clearly have a head clear about your most pressing strategic priorities – driving
start in modernising operations, reaching into new markets down costs or connecting with digital native investors, for
and diversifying their product range. But there is still a place example. You can then focus investment on the specific tools
for managers of all sizes in a market where innovation and and technology needed to deliver. Other priorities can be
specialist expertise are more prized than ever. This could addressed further down the line. You can also partner with
include partnering with an existing ETF provider, using a white- service providers where in-house development is too costly or
label provider and/or outsourcing some of the middle and back inefficient. Generative AI could help to increase the speed and
office functions to third parties. productivity of your business helping to save time and money.

Millennial investor opportunity Strengthen purpose and trust

More than $68 trillion could be passed from baby boomer The challenge of building and sustaining trust is increasing as
parents to millennials by 2030 as outlined in our paper what have been relatively easy to understand ETF products
Asset and wealth management revolution 2023. Millennials become more sophisticated and diverse. The bar has been
highly favour ETFs according to various investor studies over raised even further by the focus on ESG and increasing use of
the past few years. Firms will need to find ways to reach those AI in marketing and analysis of investor needs.
millennial investors who typically manage their own investments.
Marketing through social media platforms, podcasts and apps This underlines the need to embed purpose, trust and
will be important to target these millennials who prefer real-time customer outcomes in your strategy and operations even if this
information. comes at the cost of short-term returns. This includes taking a
clear and consistent line on diversity, sustainability and social
inclusion. As product suites diversify, technology advances and
Balance ambition with pragmatism new environmental reporting requirements come on stream, it’s
also important to develop the culture and governance needed
While thinking bigger and being bolder, you should still be
to make sure you’re living up to your promises.
pragmatic. It is important to identify and focus resources on
what your firm is good at, while driving operational efficiencies
and rationalising sub-scale offerings.

17 ETFs 2028: Shaping the Future

Directory

Ireland

Marie Coady Aoife O’Connor Mary Ruane

Global ETF Leader, Partner, PwC Ireland Partner, PwC Ireland
Partner, PwC Ireland [email protected] [email protected]
[email protected] +353 87 774 3069 +353 86 343 8670
+353 87 994 8308

Nicola Sheridan Sean Savage Louise Haudebourg

Director, PwC Ireland Director, PwC Ireland Manager, PwC Ireland
[email protected] [email protected] [email protected]
+353 86 043 3017 +353 86 160 8908 +353 87 442 4436

USA Canada Asia

Beth Savino Chris Pitts Keith Chau

US ETF Leader, Partner, PwC US Partner, PwC Canada Partner, PwC Hong Kong
[email protected] [email protected] [email protected]
+1 516 428 4571 +1 416 219 0875 +852 2289 1215

Bill Donahue
Managing Director, PwC US
[email protected]
+1 617 318 8847

Luxembourg PwC Global AWM Market Research Centre

Marius Pfeiffer Dariush Yazdani Nana Duah Poku

Luxembourg ETF leader, Asset Management Market Research Centre Leader, Project Manager, PwC Luxembourg
Senior Manager, PwC Luxembourg Partner, PwC Luxembourg [email protected]
[email protected] [email protected] +352 621 332 398
+352 621 335 247 +352 621 332 191

18 ETFs 2028: Shaping the Future

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